China Tests Fail to Relieve Stress

At first glance, stress tests conducted by China's central bank appear to show a resilient banking system. But they do little to dispel fears of risks lurking beneath the surface.

The People's Bank of China gave details of the tests late Tuesday. The headline findings: Under a worst-case scenario where nonperforming loans surge by 400%, the capital adequacy ratio for 17 top banks would fall to 10.5% from just less than 12% now.